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The Ludwig von Mises Institute dedicates this volume to all of its
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Introduction
Introduction
In his work Una crítica a la teoría monetaria de Mises, Juan Ramón Rallo (2019) criticizes Ludwig von Mises’s monetary theory as developed in Mises’s (1953) Theory of Money and Credit. While Rallo criticizes Mises, he dedicates his book to Antal Fekete, whom he congratulates for having advanced Austrian monetary theory (7).
In this contribution I want to show that Rallo and Fekete do not advance Austrian monetary theory but rather defend an idiosyncratic variant of the banking school.
1. A Neo-Banking-School Approach: A Brief Overview
CHAPTER 1
A Neo-Banking-School Approach:
A Brief Overview
The economic justification for fractional reserve banking provided by the banking school lies in the alleged problems that an increase in the demand for money would cause with an inflexible money supply. These problems, which will be discussed in detail later, arise from frictions due to price rigidities or resource costs derived from the production of money proper.
2. Increases in the Demand for Money and the Ideal Money
CHAPTER 2
Increases in the Demand for
Money and the Ideal Money
2.1 Cash-Building Deflation and Its Social Function
Not only does Rallo describe how a fractional reserve banking system based on real bills works, but he also argues that such a system has important advantages vis-à-vis a full reserve system. Before I analyze the reasons Rallo provides for an elastic money supply that counteracts cash-building deflation, let us first look at the process of cash-building deflation itself.
3. Critiques of the Traditional Real Bills Doctrine
CHAPTER 3
Critiques of the Traditional
Real Bills Doctrine
4. The (Feketian) Banking-School Approach Cannot Prevent Cycles
CHAPTER 4
The (Feketian) Banking-School
Approach Cannot Prevent Cycles
5. Maturity Mismatching Is Not the Cause of the Cycle but can Be Sustainable and Dynamically Efficient
CHAPTER 5
Maturity Mismatching Is Not the Cause of the Cycle but can Be Sustainable and Dynamically Efficient
